KUANTAN, Malaysia — A $230 million refinery being built here in an effort to break China’s global chokehold on rare earth metals is plagued by environmentally hazardous construction and design problems, according to internal memos and current and former engineers on the project.

The plant, which would be the world’s biggest refinery for rare earths — metals crucial to the manufacture of a wide range of technologies including smartphones, smart bombs and hybrid cars — has also become the target of protesters who fear that the plant will leak radioactive and toxic materials into the water table.

Weekly demonstrations have drawn crowds since March, and someone recently threw gasoline fire bombs at the gated home of a senior project manager.

Some risks had been expected from the plant, which would refine rare earth ores into manufacturing-grade materials. Although rare earths are not radioactive, in nature they are usually found mixed with thorium — which is.

That is why the Lynas Corporation, an Australian company, promised three years ago to take special precautions when it secured the Malaysian government’s permission to build the sprawling complex here on 250 acres of reclaimed tropical swampland. It would be the first rare earth processing plant in nearly three decades to be finished outside China, where barely regulated factories have left vast toxic and radioactive waste sites.

Lynas has an incentive to finish the refinery quickly. Export restrictions by China in the last year have caused global shortages of rare earths and soaring prices. But other companies are scrambling to open new refineries in the United States, Mongolia, Vietnam and India by the end of 2013, which could cause rare earth prices to tumble.

Lynas officials contend that the refinery being built here is safe and up to industry standards, and say that they are working with its contractors to resolve their concerns.

“All parties are in agreement that it is normal course of business in any construction project for technical construction queries to be raised and then resolved to relevant international standards during the course of project construction,” wrote Matthew James, an executive vice president of Lynas, in an e-mail on Wednesday night.

Trading in Sydney of Lynas shares was halted on Thursday morning pending a company announcement.Malaysia’s ministry of international trade and industry scheduled a news conference late Thursday morning and was expected to announce what changes in the project would be required by the government after a review by a team from the International Atomic Energy Agency.
But the construction and design may have serious flaws, according to the engineers, who also provided memos, e-mail messages and photos from Lynas and its contractors. The engineers said they felt a professional duty to voice their safety concerns, but insisted on anonymity to avoid the risk of becoming industry outcasts.

The problems they detail include structural cracks, air pockets and leaks in many of the concrete shells for 70 containment tanks, some of which are larger than double-decker buses. Ore mined deep in the Australian desert and shipped to Malaysia would be mixed with powerful acids to make a slightly radioactive slurry that would be pumped through the tanks, with operating temperatures of about 200 degrees Fahrenheit.

The engineers also say that almost all of the steel piping ordered for the plant is made from standard steel, which they describe as not suited for the corrosive, abrasive slurry. Rare earth refineries in other countries make heavy use of costlier stainless steel or steel piping with ceramic or rubber liners.

The engineers also say that the concrete tanks were built using conventional concrete, not the much costlier polymer concrete mixed with plastic that is widely used in refineries in the West to reduce the chance of cracks.

Documents show that Lynas and its construction management contractor, UGL Ltd. of Australia, have argued with their contractors that the cracks and moisture in the concrete containment walls are not a critical problem.

Memos also show that Lynas and UGL have pressed a Malaysian contractor, Cradotex, to proceed with the installation of watertight fiberglass liners designed for the containment tanks without fixing the moisture problem and with limited fixes to the walls. But Cradotex has resisted.

“These issues have the potential to cause the plants critical failure in operation,” Peter Wan, the general manager of Cradotex, said in a June 20 memo. “More critically the toxic, corrosive and radioactive nature of the materials being leached in these tanks, should they leak, will most definitely create a contamination issue.”

Mr. Wan said in a telephone interview Tuesday that he believed Lynas and UGL would be able to fix the moisture problem but that he did not know what method the companies might choose to accomplish this.

The fiberglass liners are made by AkzoNobel of Amsterdam, one of the world’s largest chemical companies. AkzoNobel says it, too, worries about the rising moisture.

“We will not certify or even consider the use of our coatings if this problem can’t be fixed,” Tim van der Zanden, AkzoNobel’s top spokesman in Amsterdam, wrote on Monday night in an e-mail reply to questions.

Memos show that the refinery’s concrete foundations were built without a thin layer of plastic that might prevent the concrete pilings from drawing moisture from the reclaimed swampland underneath. The site is located just inland from a coastal mangrove forest, and several miles up a river that flows out to the sea past an impoverished fishing village.

An engineer involved in the project said that the blueprints called for the plastic waterproofing but that he was ordered to omit it, to save money. The plastic costs $1.60 a square foot, he said.

Lynas disputes that the design ever called for using the plastic.

Nicholas Curtis, the executive chairman of Lynas, said in a telephone interview from Sydney on Monday that the project here met local environmental standards and that he believed those were consistent with international standards. “I have complete confidence in the Malaysian environmental standards and our ability to meet the requirements,” he said.

Mr. James, the Lynas executive vice president, said in a separate telephone interview from Sydney on Monday that the steel piping used in the plant was carefully engineered and would not pose problems. On the record, he declined to discuss issues with the concrete except to deny that rising moisture was a problem and to say that the tanks had been engineered to meet all safety standards.

In a second interview, on Tuesday, Mr. James said the company had not cut corners. “Lynas is well funded,” he said. “We would never compromise our standards for a cost savings.”
UGL declined to comment, citing a corporate policy of not discussing its customers’ construction projects.

Lynas started the project here three years ago, but had barely begun when it ran short of money during the global financial crisis. The company resumed the project last year after Chinese export restrictions on rare earths prompted banks and multinational users of the materials to offer generous financing.

Malaysia had reason to be cautious in allowing Lynas to build the plant. Its last rare earth refinery, operated by the Japanese company Mitsubishi Chemical, is now one of Asia’s largest radioactive waste cleanup sites. That plant, on the other side of the Malay peninsula, closed in 1992 after years of sometimes violent demonstrations by citizens.

Despite the potential hazards, the Malaysian government was eager for investment by Lynas, even offering a 12-year tax holiday. The project is Australia’s largest investment in Malaysia, intended to produce $1.7 billion a year in rare earths, or nearly 1 percent of Malaysia’s entire economic output.Lynas agreed to pay 0.05 percent of the plant’s revenue each year to the Malaysian Atomic Energy Licensing Board for radiation research.

To address public worries about the new plant, the Malaysian government invited a team of experts from the International Atomic Energy Agency in Vienna to visit the site in early June. The team is to submit its report to the Malaysian authorities on Thursday, and the Malaysian government has said it plans to release the report to the public.

Engineers at the project said that Lynas officials had whisked the international inspectors through the factory in a single morning, partly because of security concerns about protesters outside the refinery gates. The team had little chance to examine the refinery’s structure, the engineers said.

Gill Tudor, an agency spokesman, declined to comment on the team’s work because it is not yet public.
Although Lynas has forecast repeatedly in recent months that it will start feeding ore into kilns by the end of September, engineers here said that it would take nine more months to install electrical wiring. They also said that pipe shipments were far behind schedule because of a six-month delay in ordering.
Mr. James insisted on Monday that the project remained on schedule, but he cautioned that Lynas was waiting to see whether the I.A.E.A. panel recommended any changes.

KUALA LUMPUR, June 30 — Australian rare earths miner Lynas Corp won today international approval for its RM700 million plant being built in Malaysia’s east coast after a UN review panel said it posed no radioactive risks to the thousands who live and work there.

But International Atomic Energy Agency-appointed (IAEA) panel recommended 11 improvements for Putrajaya to implement before awarding Lynas further licences, including the one the miner needs to start pre-operations.

The federal government has also pledged it will adopt all the suggestions.

The Sydney-based company had previously hoped to fire up its plant by September; it will be announcing its next step later today.

Putrajaya, under pressure to show that the plant does not pose any radioactive risk, had called for experts from the IAEA to form an independent panel to review the health, environmental and safety aspects of Lynas’ rare earths plant in Pahang.
“The IAEA report concluded that it did not find any instance of ‘any non-compliance with international radiation safety standards’ in the Lynas project,” said Datuk Seri Mustapa Mohamed and Datuk Maximus Ongkili in a joint statement today.

Mustapa heads the International Trade and Industry Ministry (MITI) while Ongkili is the Minister for Science, Technology and Innovation (Mosti). Both were absent from today’s news conference but their prepared statement was read aloud by MITI secretary-general Datuk Dr Rebecca Sta Maria.

But the government and the Atomic Energy Licensing Board (AELB) declined to comment on a New York Times report today claiming Lynas’ Gebeng plant is being plagued by design problems and hazardous construction issues.

When asked, Sta Maria said she had read the article and would leave it for Lynas to comment.
The nine-man expert panel found Lynas to have complied with international health and safety standards, after a month-long review.

Among the panel’s recommendations are for the federal government and its agency, AELB, to require Lynas, before the start of operations, to submit a plan detailing its waste management in the long run.
The review panel highlighted the need for the miner to address the management of the water leach purification (WLP) solids after it shutters the Gebeng plant, together with a safety case supporting its plan, which it listed as follows:

• Future land use (determined in consultation with stakeholders)

• The dose criterion for protection of the public

• The time frame for the assessment

• Safety functions (example containment, isolation, retardation)

• The methodology for identification and selection of scenarios, saying “this must include the scenario in which the residue storage facility at the Lynas site becomes the disposal facility for the WLP solids”

• Any necessary measures for active and/or passive institutional control. It noted that as the safety case develops, there will be a need to update the plant’s overall radiological impact assessment (RIA).

The review also recommended Lynas ready a fund to cover the cost of the long-term waste management and decommissioning and remediation of the plant.

IAEA’s nuclear fuel cycle and waste technology chief Tero Varjoranta, who headed the review team, also urged the federal government to prepare a clear action plan and set a timeframe for the measures to be carried out within the next one to two years — in a short video clip timed to coincide with the public release of its report.

Lynas has said that its plant — which will extract rare earth metals crucial for high-technology products such as smartphones, hybrid cars and wind turbines — will create a RM4 billion multiplier effect annually and will hire 350 skilled workers, 99 per cent of whom will be Malaysians.
Although reports say the plant may earn RM8 billion for Lynas, more than one per cent of the

Malaysian GDP, critics have questioned the real economic benefit of the project, pointing to the 12-year tax break the Australian company will enjoy due to its pioneer status.

The federal government defended the Lynas project was a “strategic industry” for Malaysia in spite of the controversy it has attracted .

Sta Maria said the government expects Lynas to spend RM400 million a year, in addition to the RM700 million it has already poured into the rare earths plant.

It had previously estimated investment spinoffs of RM2.3 billion from the plant, including the RM300 million already poured into two factories in the Gebeng industrial zone that will produce hydrochloric and sulphuric acid needed to extract the rare earth metals.

Sunday, 26 June 2011

From as far as the eyes can see -the Kuantan residents chanting 'Stop, Lynas!' after their descend from Bukit Pelindung (Photo by: Tan Lih Huei)

Yet another great day out for Kuantan folks! 3,500 people poured in since 6.30am on this lovely Sunday morning for a show of solidarity to Stop Lynas! In record numbers, they came with their family members. Young & old, men & women, parents & children came with enthusiasm written all over their faces. Bearing Malaysian flags & wearing Save Malaysia, Stop Lynas! t-shirts, they gathered at the foot of Pelindung Hill warming up for their march up the hill while snacking on cakes, bread & water provided by the organizers. New friends were made as many of the folks shared with each other about their ideas to stop Lynas. Some of them inked their thoughts unto a huge banner depicting the messages of hope for Kuantan town. As of 8pm sharp, the march up the hill began, with Save Malaysia Chairman, Tan Bun Teet, giving the flag-off. Whe they folks, reached the top, they had a photo-session together. And just as they descended, they were greeted too with another request for a photo-session with those who just arrived. By this time, Kuantan's Member of Parliament, Fuziah Salleh paid a visit & joined a group of Mahasiswas & Mahasiswis (Undergaduates from KL) as they sang along to a tune they made up on the spot. Their chorus of 'Mahasiswa tolak Lynas', 'Balik, Balik Lynas' drew a resounding applause and set up the momentum for the next big gathering!

Saturday, 25 June 2011

IMPORTANT NOTE: THIS SOLIDARITY WALK @ BUKIT PERLINDUNG IS THE OFFICIAL SAVE MALAYSIA EVENT. NOT THE ONE @ STADIUM DARUL MAKMUR (Which is organized by PKR & DAP). Both events share the same agenda, which is the people's agenda to STOP LYNAS!

(Click to enlarge)

(Click to enlarge)

Join us in a solidarity walk around Bukit Pelindung this coming Sunday to kick-start the National NGO Seminar happening on the very same day! Bring your family members and let us make it a day to remember! Together we shall march in unison and send a resounding message that we do not welcome the Lynas Advanced Materials Plant in our beloved hometown!

THIS SEMINAR IS OPEN TO THE PUBLIC & THE ADMISSION IS FREE!*For participants who will be having lunch with the NGO members, please come to Swiss Garden Resort at 12pm. For all other participants who are just attending the seminar, please come at 1pm. Thank you.

As we brace ourselves for IAEA's report on LAMP, civil societies & non government oragnizations (NGOs) from all over Malaysia will converge in Kuantan to discuss & strategize the next move to Stop Lynas from going ahead with its dry run in September. This show of solidarity among environmental, human rights & concerned citizens groups will help unite our cause and strengthen our understanding. Come & join us and be a part of this historic event. We all live in hope that our children will inherit a toxic-free future. Save Malaysia, Stop Lynas!NOTE: There will be a lunch session with the members of the National NGO @ Swiss Garden Resort. Anyone who is interested in joining please contact Grace Lee for booking. A minimum contribution of RM40 per person will be required for the lunch.

Wednesday, 22 June 2011

INTERNATIONAL SURFING DAY! .....Come & join the HOT surfer hunks & chicks as they surf their way against the radioactive tide! Joining us on a UNITED front against Lynas, the surfer community has pledged to keep our shores free from radioactive pollution so that the future generation will be able to surf with a peace of mind! Let us support their cause! Exciting porgrammes such as canvas painting sessions, flea-market sales, photography sessions with the surfers, music performances, beach games & BBQ meals are in store! We will also be embarking on a beach clean-up to show that we mean business in preserving our environment for the current & future generation. Generation Now! Geneartion Next! Consolidate to save our fate! =)

Fathers, mothers & children come together to form the STOP LYNAS! word. (Photo by: Terenze Lim)

It was an event not to be missed! And what an event it was! A committee of supermoms organized one of Save Malaysia's most successful programmes to date! It was a beautiful Sunday morning in Taman Gelora, when entire families from all over Kuantan came together to celebrate Father's Day. Themed 'Daddy, You're My Hero!', children & their mothers joined their fathers in a solidarity walk around Taman Gelora chanting "Stop Lynas! Save Malaysia!" & "Save our children!" Around 2000 people, young & old from different races, took part in this walk while waving the Jalur Gemilang & the Pahang flag. An origami display was also set up in the middle of the park. Each origami paper crane bearing a personal message of hope that Kuantan would be free of radioactive contamination. Soon after the walk, the paticipants gathered to form the STOP LYNAS! word in an open field (pictured above). They braced the hot sun & patiently waited while the marshals instructed them on their standing positions. Sheer passion! The day ended with the judges awarding prizes to the children who took part in the colouring contest that was held simultaneously across the field. The colourful masterpieces by the children of Kuantan made us realize how precious these little lives are. So let's do our best to preserve our environment for their future. ...What a wonderful day it has been! Let's hope that the government & Lynas hears our plea!